At a Glance
The One Big Beautiful Bill Act (OBBBA) introduces new Medicaid work requirements (2027) and stricter ACA subsidy verification (2028).
These changes could lead to widespread patient coverage loss, especially in rural and community hospitals.
Hospitals should prepare now through financial planning, denial prevention, and patient eligibility navigation.
Early action will help healthcare organizations manage uncompensated care and protect revenue as the new rules take effect.
How OBBBA Will Impact Rural and Small Hospitals
The One Big Beautiful Bill Act (OBBBA), signed into law on July 4, 2025, is being called the most sweeping health legislation since the Affordable Care Act. As currently written, it will reshape Medicaid and ACA eligibility in ways that could significantly affect who qualifies for health coverage.
For rural hospitals and small hospitals, this translates into real financial pressure:
More patients arriving without insurance
More denials and unpaid bills
Operational changes needed to keep revenue flowing
Hospitals—especially those that serve as the backbone of their communities—will be on the front lines of this patient coverage loss. The details could still shift as the law is implemented, but hospital leaders cannot afford to wait until 2027 or 2028 to act. Some changes are already taking shape, and the time to prepare is now.
Medicaid Work Requirements in 2027: New Rules for Hospitals
Starting January 1, 2027, states must enforce new Medicaid work requirements (also called “community engagement rules”). Certain adults will need to show they are working, in school, or volunteering to keep their coverage. States may apply for exceptions, but most are expected to tighten eligibility instead of loosening it.
The hospital revenue impact will be clear:
Patients will experience more churn as they cycle on and off Medicaid coverage.
Hospitals often discover coverage loss only when a patient seeks care.
Rural hospitals and safety-net providers will likely see the steepest increase in uncompensated care.
Insurance discovery tools can help hospitals uncover active or secondary insurance coverage that might otherwise be missed, even after a patient is discharged. These solutions reduce bad debt, speed up reimbursement, and give hospitals clearer visibility into potential revenue in an uncertain Medicaid environment.
ACA Eligibility Changes: Stricter Subsidy Rules Ahead
Another major shift—this one to ACA subsidy verification—will happen in 2028, when the current “pay first, verify later” model ends. To receive premium subsidies on the Marketplace, patients will have to prove eligibility upfront.
If documentation isn’t correct, subsidies won’t apply—and many patients will simply drop their ACA plans.
For hospitals, these ACA eligibility changes likely mean:
More patients uninsured at the point of care
Increased self-pay risk and fewer elective services
A heavier load on financial counseling teams, who will need to help patients reapply or navigate new coverage options
These changes make proactive hospital financial planning essential to anticipate revenue shortfalls.
State-Level Medicaid and ACA Policies: Why Local Decisions Matter for Hospitals
he OBBBA gives states flexibility in how they implement the law. That means state-level Medicaid rules will directly shape each hospital’s financial outlook.
For rural hospitals, these differences can be especially significant, since a small change in coverage rules or how funding is handled can have an outsized impact.
States will vary in:
Work requirements: Some states will set up strict reporting systems that make it harder for patients to prove they meet Medicaid work requirements, while others may take a more flexible approach. This will directly affect how many people remain insured.
Optional benefits: States decide whether to keep or cut extra services such as dental, vision, or behavioral health. Reducing these benefits may save state budgets, but it shifts more costs to patients and hospitals.
Provider taxes: Many states rely on provider taxes to help fund Medicaid. Under OBBBA, these taxes are capped, and states will need to choose how to adapt. Hospitals in states that cut back aggressively could see less money flowing back into the system.
State-directed payments (SDPs): These are supplemental Medicaid payments that some states use to boost hospital reimbursement. OBBBA phases these down, but the timeline and severity will vary by state. Hospitals in states that reduce SDPs quickly may feel the financial pressure sooner.
For hospitals, this means:
Those in strict states could see steeper coverage losses.
Medicaid payment levels may shrink as provider tax and SDP options narrow.
Each state will implement OBBBA differently—the way your state does it could directly affect your hospital’s financial exposure.
Smart Hospital Strategies for OBBBA
Hospitals can’t control how federal and state policymakers choose to implement the One Big Beautiful Bill Act—but they can prepare for the challenges it will bring with smart operational planning.
Assess your Medicaid/ACA payer mix to understand financial exposure. Hospitals need to know exactly how much revenue is tied to Medicaid and ACA Exchange patients. Rural hospitals, where these programs often represent a large share of coverage, are particularly vulnerable if patients lose insurance.
Stay engaged with your state hospital association. As noted earlier, states will vary widely in how they roll out Medicaid work requirements and financing changes. By staying connected to your association, you’ll have a clearer picture of when and how your hospital may be affected.
Budget for higher uncompensated care and strengthen financial counseling services. Hospitals may be the first place where coverage loss is discovered—often at the point of service. You can help protect your bottom line by preparing your budget for higher uncompensated care and building up financial counseling teams to help patients re-enroll, find alternatives, or qualify for presumptive charity care when appropriate.
Train front-line staff—or invest in tools—to identify coverage gaps quickly. Staff who can spot coverage lapses early can help prevent denied claims and support patients before they fall through the cracks. Eligibility software solutions can reinforce this effort.
Operational Actions
Invest in eligibility navigation for patients. Offer staff or technology options—like kiosks, tablets, or digital check-in tools—that guide patients through eligibility checks.
Provide enrollment assistance. Patients facing new work requirements or ACA verification hurdles may need hands-on help. Hospitals will be directly affected by how these rules play out, so helping patients complete enrollment paperwork isn’t just patient service—it’s a financial safeguard.
Add digital self-service tools. Online portals or apps where patients can confirm coverage, upload documents, or reapply for insurance help reduce drop-offs in coverage and keep more people insured.
Strengthen denial prevention processes. As OBBBA rules take effect, denials are likely to rise. Hospitals should double down on clean claim submission, front-end eligibility checks, and coding accuracy to avoid unnecessary revenue loss.
Explore value-based contracts. Value-based models can help stabilize revenue during times of coverage churn. For smaller hospitals, this may mean joining networks or partnerships that allow for shared risk without overexposing the hospital financially.
Prepare Now for OBBBA Impact
The OBBBA is set to bring significant change to how patients get—and keep—coverage. For community hospitals and rural hospitals, this means greater risk of uncompensated care, financial stress, and denied claims. Waiting is not an option.
Hospitals that act now to strengthen financial counseling, denial prevention, and eligibility navigation will be best positioned to handle the impact and continue serving their communities.
TruBridge helps rural and community hospitals navigate Medicaid changes with revenue cycle solutions. Discover how we can help your hospital protect revenue amid OBBBA’s eligibility changes.
